The Inflation Reduction Act, which was recently passed and signed into law, includes an array of resources and tax incentives to help homeowners and commercial building owners make their properties more energy efficient.
Studies show that if property owners across the U.S. weatherized their buildings and installed high-efficiency heating, cooling and water-heating equipment, they would save billions of dollars on energy costs and reduce carbon emissions. With the help of NAR members, and these incentives, owners of real estate will begin to put these systems in place and realize these benefits.
Building owners making energy-efficiency retrofits that are part of a qualified retrofit plan on a building that is at least five years old are able to deduct their adjusted basis in the property, as long as that amount doesn’t exceed a per square foot value determined on the basis of energy usage intensity.
A tax-exempt entity is allowed to allocate the deduction to the designer of the building or retrofit plan.
The investments made by the Inflation Reduction Act will benefit property owners by helping them save money on utility bills, make their buildings more comfortable and reduce their carbon emissions.
For additional resources, visit NAR’s Sustainability page. This page will be updated periodically as these IRA programs come online.
Russell Riggs is NAR’s senior policy representative for environmental issues.
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